Unemployment Followup

From jobseekers in Spain, we turn to those here in the U.S. The latest employment numbers revealed that there are still many more Americans looking for work than there are our jobs that need filling. The May jobs report showed the economy added an anemic 69,000 jobs - about half the number that were added in April. Yet, here's the paradox: Despite the high number of people seeking jobs, many employers insist they can't find the right person for the exact positions they have open.

To understand that paradox, we turn this morning, as we often always do, to David Wessel. He's economics editor of The Wall Street Journal, and he wrote a recent column tackling this conundrum.

Good morning.

DAVID WESSEL: Good morning, Renée.

MONTAGNE: So David, how is it that so many people can't find jobs and yet there are employers who say they have jobs needed filling. Is it simply a mismatch of skills?

WESSEL: Well, there are basically two views about unemployment today. One is that the biggest problem is there just isn't enough demand out there, not enough spending so employers are reluctant to hire readily. And if that's right, then there are things the government might do to stimulate demand - either Congress, or the president or the Federal Reserve.

The other view is the biggest problem is, as you suggest, this mismatch between the skills that employers need and the ones that available workers have. And if this view is right, and the fiscal and monetary policy can't do much. So people on the second camp seize on these very loud complaints from employers that they just can't find the workers they need. And the real question is how can that be?

MONTAGNE: Well, offer us an answer or two.

(LAUGHTER)

WESSEL: Well, I talked to a business school professor at the University of Pennsylvania, Peter Cappelli, and he suggested a number of possibilities. One is that with so many unemployed workers, employers may simply be too picky. They're looking for the perfect worker. They won't settle for the merely capable. One person in the business calls this looking for a unicorn. A second possibility is they're just not willing to pay enough. A third is that they've lost interest in training and they're insisting on experienced workers, so they're turning away a whole lot of people who could do the job but just don't have experience. And then, in what I find most provocative possibility, they've become over reliant on the software that's used to screen applicants.

MONTAGNE: Now software, that's an interesting idea.

WESSEL: Right. A whole lot of people who have applied for jobs lately, know that the initial application often is done online. That's because software takes the employers criteria, which is often extraordinarily precise, and then screens the application. There's one company that Mr. Cappelli writes about in the new book that says he had 25,000 applicants for a standard engineering position, only the software in the HR department told him nobody was qualified.

In another one, an HR executive, in an experiment, applied for a job in his own company and couldn't get through the software screening. And as you mentioned, I wrote a column about this and I got flooded with people with experiences like this who were just enormously frustrated with the software and how it was preventing them from getting to a human being to get an interview on a job that maybe they could do.

MONTAGNE: And you eluded, a moment ago, about something related to this and that's training, that American companies - employers - have lost interest or no longer willing to offer training. I mean that's, they want somebody who fits the job exactly. What would sway them to invest a bit more in that?

WESSEL: Well, training has always been a complicated issue, because employers are reluctant to spend a lot on training somebody who then can go work somewhere else. And with less loyalty among employee's, of less loyalty among employers, there's probably more reluctance to that. That's why employers are so interested in getting the school systems to better prepare workers.

In general, jobs require more training, more computer know-how, but companies don't train as much as they did, they prefer to hire workers who already know how to do the exact job. And the government training programs don't seem to be doing a very good track record. So this is something that could be fixed. It's just hard to fix.

MONTAGNE: OK. What could you do, if you could do anything...

(LAUGHTER)

MONTAGNE: ...that would get employers hiring at a rate equivalent to the talent pool that's available?

WESSEL: Look, I think there are a couple of things we know and what we don't know. One thing we know is that if employers were willing to do a little more training, and maybe there was some way the government could give them an incentive to do that, they might be able to take people who are capable of doing jobs but don't have exactly the right skills. And the thing is, the software needs to be redone so it's not so picky and it flags, for consideration, by a human being - an applicant who doesn't quite fit the bill but could do the job

MONTAGNE: David, good to talk to you.

WESSEL: You're welcome.

MONTAGNE: David Wessel is economics editor of The Wall Street Journal. Transcript provided by NPR, Copyright National Public Radio.